Elon And Trump Break Up - What Happens Now

Welcome back, everyone, today on the Joseph Carlson Show. If for some reason you were offline or away from the news over the past 12 hours, then you missed perhaps one of the biggest beefs of all time. This is the beef of the most powerful man in the world and the richest man in the world. We've seen inklings of this relationship deteriorating over the past 24 hours. The first signs were Elon Musk criticizing President Trump's key legislation, the Big Beautiful Bill, calling it a bloated pig. And from there, things derailed. Yesterday was the day that Trump and Musk torched their partnership. The relationship has completely imploded. Insults, intense insults were hurled left and right, from one to the other, across the web for the world to see. And today, we're looking at it from an aftermath, like a big accident happened, like a plane crash or a train wreck. And we're just looking at what happened. Now, we're going to be going through the details, the timeline of events, how we got to this point, what it means for both President Trump and what it means for Elon Musk. We're also going to be going over many of the responses to this event. People like Dan Ives, Gene Munster. These are Tesla investors, Tesla enthusiasts going on the TV quickly to play damage control. Now, we also have some good news on the day. We had the jobs report come in. This was hinted at by the ADP report that looked really gloomy. The jobs report came in a little bit higher than analysts expected. We'll be looking at the numbers and what this means for the market. We also have news that Lululemon reported their earnings are down 20%. We're going to see what's going on with this company, why the stock is cratering. And we have a report from the information that Amazon is reportedly training humanoid robots to deliver packages. We'll be looking at this as well. Now, we have a lot to cover in this episode, and we'll start things off with the main story, the implosion of this relationship. It seemed like just yesterday that Elon Musk and Trump were together in the Oval Office, talking about how good the relationship was, how appreciative Donald Trump was of Elon Musk's efforts. Musk there in his doge hat, his doge father t-shirt, standing alongside the president. Now, this was a kind of odd, sometimes awkward relationship from the beginning. Having the richest person in the world, a business leader, intermingling with the president, it's just a bit different than what you normally see. But we saw this go on for months, where Elon Musk was basically one-on-one with Trump all the time. And from what we heard, even though they may not agree on everything, they're besties, they're friends. They're very close with each other. Some people even called them family. In fact, they were family, and extended family photos of them taken at Mar-a-Lago, like they had adopted Elon Musk into the family. Now, fast forward just a few moments, and the front page of the Wall Street Journal is literally filled with articles about the implosion of this very relationship. So how did we get here? The first thing that I think is important to note is that there has been frustrations building up with Elon Musk and the White House administration, which is President Donald Trump's team. Those two groups, Elon Musk and President's team, have grown a little bit frustrated with each other for some time. In fact, just six days ago, senior Trump aides swallowed their irritation with Elon Musk and planned a chummy Oval Office send-off for him. They briefed the President on the allegations of Musk's drug use, so Trump would be ready to defend the billionaire when reporters raised the issue at his goodbye event. As late as Wednesday evening, Trump played down any conflicts with Musk in meetings with Republican senators, even though the billionaire had spent the past few days disparaging the President's legislative agenda. That's the big thing that's caused this. If you've been on X or Twitter or whatever you want to call it, Elon Musk has been non-stop bashing the Republican legislative agenda, the big beautiful bill. Now, you can have whatever thoughts you want on the big beautiful bill. You can believe it's a bad bill or a good one, or you can believe that in politics, you don't get everything you want. You're not going to get all the tax cuts or the incentives or the credits or everything that you want in a single bill. After all, you have a lot of representatives, a lot of limitations, a lot of constituents representing different cohorts of the population. Now, Elon Musk knows that President Trump can't just demand everything he wants in a single bill. He has to make these compromises. Republicans have a slim majority in the House of Representatives, but Elon Musk was highly critical of the bill anyways. It seems like Elon Musk wasn't just critical of the bill, but the bill was representative of his frustrations of other things going on in the White House, other things happening personally between his relationship with the administration. And there are some things that Elon Musk was likely frustrated about. Over the weekend, after Trump dumped Musk's ally as the head of NASA, the president made it clear to associates that he wasn't planning a high profile confrontation with his former advisor, according to a person who talked with the president. Now, this doesn't seem like that big of a deal, but this is actually a big deal. Elon Musk had a strong suggestion of the head of NASA, and the Trump administration did not listen to Elon Musk's suggestion. That seemed a bit underhanded to Elon Musk because, after all, he's the one flying rockets to space. He's the one with SpaceX. He has likely more experience than most people on Earth with dealing with these type of technologies. So he felt like he had big weight in the decision of the head of NASA, and Trump didn't ultimately go with Elon Musk's suggestion. So you see how that could be frustrating for Elon Musk. After this event of him not choosing the head of NASA that Elon Musk wanted, all goodwill disappeared on Thursday. Elon Musk's critiques and criticisms for the big beautiful bill got more and more intense, calling it a bloated pig, calling it all these names, and Trump had heard enough. Thirteen minutes into an Oval Office meeting Trump laid out his frustrations with Musk. Listen to what Trump says here, and keep in mind, he has the German Chancellor in the White House, in the room with him. President Trump initially addressing this issue seemed to be somewhat moderate. He actually showed a little bit of restraint here. He didn't hit back on Elon Musk or do anything too personal. He just said that he disagrees with him. But after enough time, this got to a boiling point. President Trump had heard enough. By Thursday night, Trump had publicly toyed with cutting off government contracts to Musk's companies. He said that he went crazy and suggested that he is suffering from Trump derangement syndrome. Now, I don't mind so much the Trump derangement syndrome insult there, or even saying that he went crazy. Obviously, these are big insults. But what's really uncalled for from the president is to toy with cutting off government contracts from a private company because of a personal feud. The president should not be doing that. It is indefensible for President Trump to use his position to try to determine the outcome of companies because of personal feuds. So, in that case, he was completely wrong. Now, this gets so bad from here. It gets so much worse than you would anticipate. Musk started floating the idea of a new political party, suggesting that Trump should be impeached, argued that Trump's tariffs would trigger a recession, and pledged to decommission a valuable piece of space equipment. So, once President Trump targeted Elon Musk's businesses, he gets real personal. The message is, again, posted to the entire world. None of this is done behind closed doors. This is all just to hundreds of millions of people. Elon Musk says, I'm sorry, but I can't stand it anymore. This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Shame on those who voted for it. You know you did wrong. You know it. Elon Musk says, whatever. Keep the EV solar incentive cuts in the bill, even though no oil and gas subsidies are touched. Very unfair. But ditch the mountain of disgusting pork in the bill. In the entire history of civilization, there has never been legislation that both is big and beautiful. Everyone knows this. Either you get a big and ugly bill or a slim and beautiful bill. Slim and beautiful is the way. So, Elon Musk is taking a bit of Trump's strategy of branding. Trump loves giving these monikers and names to things, big and beautiful. And in this case, he's using that tactic against him, saying it's slim and beautiful, or big and ugly. Now, you have to know Elon Musk and Trump. When you're renaming bills and going after things, his key piece of legislation, which Trump is trying to advertise as this great bill for America, this is personal. This isn't friendly banter between two friends. Now, when Elon Musk gets in these cycles of accusations, we've seen him do this before. He did the same thing with Sam Altman. He gets in a cycle, like he gets out of control, or he loses his nerve, and he posts and posts and posts on X, with the posts getting more severe, more personal. Anything that he can scrap together as a gotcha insult, he tries to put in this flurry of posts. The next one from Elon Musk is, without me, Trump would have lost the election. Dems would control the House, and the Republicans would be 51 to 49 in the Senate. Such ingratitude. Now, again, this doesn't seem too bad, but realize that this is a very personal message. Trump and Elon Musk are both very prideful people, very proud of what they accomplish. When we look at Trump, he won that election, and Elon Musk is trying to take the thunder away from him, saying, it wasn't because of you. I did that. I'm the one that won you the election. He is directly trying to steal the limelight, the thunder, the credit for winning the election from Trump. That's about as personal as it can get. Do you think Trump likes hearing that someone else is taking credit for his victory? No chance. No chance that he enjoys hearing that from Elon Musk. This is about as personal as it can get. Elon Musk is trying to get under Trump's skin any way possible, but he doesn't end here. The flurry of posts continue. In the mix of this, President Trump starts to respond on his own version of Twitter, which is Truth Social. He says, Elon was, quote, wearing thin. I have asked him to leave. I took away his EV mandate that forced everyone to buy electric cars and nobody else wanted, that he knew for months I was going to do, and he just went crazy. Now, this is kind of like a tit for tat. President Trump is saying, hey, you're taking credit for me winning the election. I'm going to go ahead and say that nobody wants to buy your vehicles unless they have an EV credit. They're both kind of striking at each other's egos, taking away credit. You're successful, your company's successful because of government EV credits, and Musk here is saying, you're successful because I got you into the White House. Trump also continues to post saying, the easiest way to save money in our budget, billions and billions of dollars, is to terminate Elon's government subsidies and contracts. I was always surprised that Biden didn't do it. There he is again striking directly at Elon Musk's businesses. There we have them trading these individual insults, striking at each other's pride. Then we move on and get to the big bomb, as Elon Musk calls it. This is kind of like his drop the mic moment in this ridiculous feud between these two people. Elon Musk says, time to drop the really big bomb. Real Donald Trump is in the Epstein files. That is the real reason that they have not been made public. Have a nice day, DJT. He has a nice little sign off there to try to really let it sink in, try to make that one really hurt. That's the big bomb. This is the one that's going to get hundreds of thousands, millions of likes, tons of retweets, suggesting that President Trump doesn't want to release the Epstein files because he has incriminating evidence within it. Elon Musk, a few minutes after posting that, doubled down and said, mark this post for the future, the truth will come out. This is the last big bomb dropped in this entire dispute. Now, looking at this timeline of events, this entire dispute, I want to fact check a couple things and give some important context here. The first one is the EV and solar incentive dispute. Elon Musk says that he doesn't care if you remove the EV solar incentives, but you're not removing any subsidies for oil and gas, and that's unfair. There's also been many people that have told me that Elon Musk has been very outward and very affirmative in saying that he doesn't mind if the EV and solar incentives are cut. He doesn't care about them at all. That's what he publicly says. Those don't matter. Now, to a Tesla investor, these EV solar credits actually add up to a lot of money. In 2023, for example, Tesla made $1.79 billion in sales from carbon credits. Those are regulatory credits. These are the EV credits that we're talking about here. If they're removed, this $1.79 billion vanishes. $1.79 billion is a lot of money to a company that's only generating less than $7 billion in free cash flow. This makes up a good chunk of the profitability of Tesla. These EV credits have been beneficial in getting people into EVs. So, Musk is saying publicly, and he said before that he doesn't care about the EV credits, go ahead and remove them, but obviously they do mean a lot to Tesla. They help out Tesla's business. Now, on the note that it's unfair because there's oil and gas subsidies, there are no tax credits for buying a gas vehicle. If you go and buy a gas vehicle, you are paying full price for that vehicle. So, the oil and gas subsidies they're talking about are for the businesses themselves, for the CapEx investments. There are huge oil subsidies and gas subsidies for the businesses themselves. But there's also huge incentives for every big business, including Tesla. The Nevada Gigafactory received a $1.3 billion tax incentive package from Nevada. The Vermont factory received a $465 million loan from the US Department of Energy. Even outside of the US, Tesla receives government subsidies. This happens with virtually every big business. All these businesses are subsidized by the government, but EVs are uniquely subsidized in the direct purchase of a vehicle, and gas vehicles do not receive that credit. And on the note that Elon Musk doesn't care about the removal of EVs because he's said so publicly, there is conflicting reports on this. Bloomberg reported that Elon Musk is on a mission to block President Donald Trump's tax bill after he tried and failed to convince Republican lawmakers to preserve valuable tax credits for electric vehicles in the legislation. The Tesla chief executive officer personally appealed to Mike Johnson to save the tax credit, the person said requesting anonymity to discuss a private conversation. Again, this could possibly be wrong. Maybe the informant in this case doesn't really know, or it's just made up. But either way, there are reports that he was trying to keep these in. The other big thing that I think needs to be addressed is this claim by Elon Musk that there's this huge incriminating evidence of President Donald Trump on the Epstein files, and that Elon Musk is privy to this, and he has this big smoking gun. He knows this information. There's a couple of reasons why I don't consider this threat serious at all. Frankly, I don't think Elon Musk has anything here. One of the reasons why is because these files have existed for years under Democratic control. And there's a lot of things that I'm willing to believe, but one of them that I'm not willing to believe is that the Democrats knew about and had access to highly incriminating evidence of President Donald Trump, and they never released it. I cannot come around to that conclusion. There's some people saying or suggesting that the reason that the Democrats would not release incriminating evidence on Donald Trump is because there's also incriminating evidence on the Democrats. But I don't believe that would be the case. I think even if there was incriminating evidence on some Democrats, they would have still released it to sink Trump. They couldn't withhold themselves. They couldn't help themselves. If they really had access to information that would sink Trump, that would make it so he couldn't become president, they would have released it and taken down any one of themselves along the way. The other reason why I don't believe that there's anything actually here is because Elon Musk is not exactly new to launching baseless or evidenceless accusations. He's done this thing a time or two. In fact, he's done something almost entirely similar to this exact post. Six years ago, Elon Musk called the British diver in the Thai cave rescue mission a pedo in a baseless and evidenceless attack. Now, why did this happen? Because at the time, Tesla tried to develop these quick little mini submarines to go through and save the kids. This was Tesla's effort to try to help out. And it was pretty cool at the time, they were trying to help. But this cave diver promptly said that these were basically a waste of time. They wouldn't help. They're too big. They're not going to fit through all the jagged edges that you have to go through in these caves. And Elon Musk took that as an insult, saying that his time and effort was wasted here, that these things are basically not useful. Elon Musk didn't like hearing that and he attacked the cave diver. He launched these accusations, calling this guy the same thing over and over again. And the guy eventually sued him for defamation. And during the trial process, Elon Musk actually looked at the diver's background, tried to do retroactive research to see if there's anything to justify the claims he had already made. And he found nothing. Absolutely nothing. This was a totally baseless, warrantless, evidenceless attack. Elon Musk has a history of saying things he probably shouldn't say that aren't exactly true during times of great frustration. And just like in the cave diver situation, where he actually apologized for saying those things, saying he was frustrated at the time, I see a very similar pattern in this case. This tweet is the response of Elon Musk trying to get under Donald Trump's skin, saying whatever he can out of frustration. So for a few reasons, I don't believe there's any big incriminating evidence that Elon Musk knows alone. Maybe I'll be proven wrong, but I just don't believe Democrats would sit on that evidence and not release it. Even if it took down some of their own members, they would want to release it. Elon Musk has a pattern of doing this type of thing. And then finally, it also would speak volumes about Elon Musk's character, if he truly knew about some big incriminating thing that the president did, but he's refusing to release any details, or he just waited until now during a fight to release it. That's not exactly a great look from Elon Musk either. To me, this strikes me as someone out of frustration going through a feud very publicly, someone targeting his company, his accomplishments, and his pride, and is responding with a lot of frustration like Now after all of this happened, after Elon Musk dropped this bomb, Trump was reportedly taken aback by Musk's escalation. Trump told advisors he didn't believe he was harsh about Musk in the Oval Office, and was surprised at how aggressive Musk became. Trump's aides spent some time Thursday trying to figure out what Musk's goal was. The president told advisors that Musk was just being a child. Now understandably, a lot of people are confused by the situation. Some people that love both Elon Musk and Trump don't really have a home or an identity right now. They're being forced to pick sides, in sometimes awkward cases. Tesla stock is up 6% on the day, but that's after dropping over 15% yesterday. Now Elon Musk is in the process of trying to walk back a lot of the damage done, making a bit more of a joke out of it. And there's also a report that Musk was going to talk to the administration this morning, that he had a call scheduled with the White House. That report is not true. Trump says he's not interested in a call with Musk. Now while this is all going on, we also have the Tesla thought leaders, the investors in it, the ones that are trying to play damage control in this situation as fast as possible. We had Dan Ives go onto TV and explain how he thinks this is working out. Now, on this point, Dan Ives is exactly correct. Part of the reason that Tesla stock rocketed up 30% after Trump's victory is the thought process that Elon Musk had closely aligned himself as an ally to the president, a key holder to regulatory approval. Many of Musk's businesses, including Tesla, operate in highly regulated industries. Robotaxi being one of the most highly regulated in existence. In many cases, when I bring up Google and I look at what Waymo's doing, a lot of people are suggesting that the big limiting factor to Waymo's growth is manufacturing capacity. That they can only grow as fast as they can manufacture or outfit cars with their sensors. That cost, that capital, is the big limiting factor here. And I think those people are wrong. I don't think that Google's Waymo is limited by capex, manufacturing, or any type of capital restraint. I believe the biggest bottleneck for Waymo by far is regulatory approval. Proving that they have a safe product that they can scale to different cities, different capacities, different types of roads and airports, and do so safely over time and get all the green tape in different localities. That is a massive undertaking. Waymo has the backing of Google. Google, if you don't know, has virtually unlimited cash flows. They generate in a single quarter $20 billion. Google could buy unlimited amounts of vehicles. They could buy hundreds of thousands, millions of vehicles in a single quarter if they wanted, and they wouldn't even have to go to the bank to do so. Capex is not a restraint for Waymo. They could invest unlimited amounts of capex. They could scale up as fast as they want. The big limiting factor here is regulatory approval. Regulatory approval is done through the government. And part of what Elon Musk had working to his benefit. It seemed like a genius 4D chess move was to become so close with the biggest person, the person that has the most control over regulation, which is President Donald Trump. So by having that close relationship, Elon Musk had both things at his side. He had regulatory approval, or at least an easier path to get regulatory approval, and of course Tesla has the manufacturing know-how. But in this case, Dan Ives is correctly illustrating that out of the things that Elon Musk did, what he did yesterday is sever ties. And not only sever ties, but he burnt bridges. He exploded the bridge with a nuclear bomb with President Trump. They're not friends anymore, and President Trump is likely not going to do anything specific to help out Elon Musk's business. Tesla is now left to its own devices with regulation. Elon Musk made sure of that yesterday. And that is not good for the Tesla investor. Yeah, I mean the timing is obviously very head-scratching in terms of Musk just going aggressively, right? In terms of the shot across the bow. And obviously next week you have the launch of cyber cab robo-taxis in Austin. So look, friends fight. So again, I think this is not one that you could basically say that's going to continue to get worse and worse. But clearly there's a line in the sand here. Musk has taken a stance. But I think the broader view, the reason Tesla stocks off the way it is, and I think overdone, is because the view that this means that Trump is not going to play nice when it comes to regulatory, autonomous, and a big part of the view that that was going to be a huge positive. And I still believe it is for Musk and Tesla. This is possibly one of the most ridiculous takes that I hear. And this isn't just Dan Ives. There's a lot of people that are going along with this take, trying to downplay the feud here, saying friends fight. Friends fight. Who amongst us hasn't fought like this? Haven't you? Haven't you fought like this with one of your friends? I mean, really, who hasn't gone on to X with hundreds of millions of followers and said that your best friend was on the Epstein list? If I had a nickel for every time I've done that with my best friend. Come on, Dan. Friends don't fight like this. This is not something we can just chalk up to a friendly banter, to a little mishap, to a tiff. Of course friends fight. That's a truism. Every friend really does fight at one point or another. But typically, that's over a small disagreement. Something that's handled through text or in person. Not blown out to the entire world on X. Not insinuating that your friend is on the Epstein list. Friends do not attack each other in front of the world with the most salacious and insidious accusations possible. This is not just some friend fight. And the people that are trying to downplay this, like, oh, this is something everybody does. It's just ridiculous. I don't know about the rest of you, but if I had a friend that did this, that went online and attacked me in similar fashion, that would not be my friend anymore. We would no longer be friends. That's not a typical fight. That's not something you just shrug off and easily move past. It's a bit different of a level. Now, I understand the attempt for people that are fans of Elon or Trump to downplay this. I really do. You want to try to downplay it. And even Elon Musk, I think, is walking back some of this after some of his frustration and heated feelings have cooled down a little bit. But the words here that were shared were not of a normal friend fight. And we shouldn't try to pretend that they were. This was an embarrassment. An embarrassment for the country, an embarrassment for Elon Musk, and an embarrassment for Trump. It was embarrassing all around. It should have been handled in closed doors or over a phone call. Not blasted out to the entire world. Now, Dan goes on to give his continued optimistic view about the future of Tesla. This is a stock that I could argue could be down a little. And it's my view that if you're a believer in autonomous, like we are in robotics, this is a $2 trillion mark cap in terms of Tesla. But the view that you went from basically first buddy in terms of Musk with Trump in the White House, Mar-a-Lago, and now they're doing this fight over social media, it's not what you want to see as a Tesla shareholder. And you saw with Trump, I think Trump's obviously a little taken aback that Musk has taken this much of a stance. But again, this is one where there can be a lot more chapters to this story. I don't think it's done right here. Now, Dan says that he could see the stock being down a little based on this news. But when the stock went up 30% after President Trump was elected based on Elon Musk's close relationship with him, Dan said that was justified. So it was justified that the stock went up 30% specifically because of this close relationship. But as that very same relationship implodes, it's not justified that the stock go down as much. Now, next, we get the instant reaction from Gene Munster on the same incident. Gene Munster, if you've forgotten, is a person where everything is bad for Google, everything is good for Tesla. So this might be a true test. Is this, in fact, finally something that's not good for Tesla, something that is good for Google? Well, we'll see. I think it was an overreaction. Ultimately, Andrew really hit the pressure point. I just want to zero in on that. When you think about AI and this arms race, undoubtedly, this is a new frontier in terms of global power. The physical AI piece is one manifestation of that. The most obvious example of that is going to be with autonomy. So just to kind of play this forward, let's take the position that Trump is more punitive to Elon. It makes it more difficult for autonomous. And then we look around and we see autonomous vehicles in China everywhere. I'm fast forwarding one, two, five years from now. And in Europe and the rest of the world, it would be a little bit odd, I think, for this personality blow up to really slow down that pace of innovation. And so ultimately, I think that what is best for the country is for autonomy to move forward. And I think that means that this is going to continue to move forward. Obviously, it comes at a big time with Tesla next week and what we're going to hear from Austin. Now, keep in mind, Elon Musk just severed his ties with the president, blew up this relationship the month that Tesla is supposed to launch RoboTaxi vehicles, the very month of it. And both Dan Ives and Gene Munster are saying that this is no big deal. The stock doesn't really deserve to be down at all. They're kind of shrugging this off. It's really not a big event. And Tesla and RoboTaxi will move on with or without Trump's approval. In terms of what Gene Munster says specifically here, that RoboTaxi is happening in China, it's going to happen in the United States. That is true. There are companies doing it in the United States right now. Tesla is not the only company that's in the RoboTaxi industry. I understand the effort that these Tesla investors want to do to downplay the events. But what was the purpose of this? What does Elon Musk and Tesla gain from blowing up this relationship? Where's the upside? Where's the tactic behind it? He severed a relationship with the most powerful man on earth that holds regulatory approval the month before launching a RoboTaxi network. What is the purpose of doing so? How is that good for Tesla stock? And in the process, another thing that I'll mention is this isn't just between a relationship of Elon Musk and Trump. This is also blowing up a relationship between Elon Musk and Trump fans. Millions of people that really like Trump, that will side with Trump over Elon. Now they're not going to be looking at Tesla as keenly as they were before. Elon Musk has already damaged the relationship between the Tesla brand and Europe. Many European countries, many citizens there refuse to buy Teslas, which were selling well, specifically because of Elon Musk's behavior and rhetoric. And now after blowing up a lot of relationships with the more liberal side, left-leaning people, especially in Europe and some in the US, he seems intent on doing that with people on the right in the United States, severing his relationship with a key figure, someone that has a lot of power and influence and with many of his millions of fans in the process. So I asked the Tesla investor again, what is the purpose of this? Elon Musk seems intent to destroy relationships across the world with many people. If that's not the intention, that's at least the outcome. And I don't see how this is good for either regulatory approval needs, key relationships, or the brand of Tesla. Overall, I see this as a massive diminishing of the brand of Tesla. Another event that will take time to figure out, time to heal. The same thing that investors in Tesla have been waiting for, for years. They've been waiting and waiting for things to get better and improve for this company. And Elon Musk, because of a petty disagreement, is in the process of pushing that in the wrong direction. Some people suggest that my commentary is negative on Elon Musk because I just have some big bias against him or that I hate Tesla. And that's not the case at all. I don't hate Elon Musk or Tesla. I'm commentating on events. I didn't force Elon Musk to wake up yesterday and cause a feud and implode a relationship with the most powerful man on earth. That wasn't my doing. He chose to do that himself. I'm looking at the evidence and observing what's going on. When I look at what Elon Musk is doing specifically with Tesla, I would be very upset if I was a Tesla shareholder. He's putting his own personal endeavors and feuds above the company. Above the company and its millions of shareholders. And the same could be said for any stock that I own. If I looked at any company that I owned, any single one of them, and the CEOs decided to get in a personal spat with the president, insulting him and burning bridges, especially if those CEOs worked in industries that rely on regulation, that would be upsetting. I'd be highly critical of them. People would say, Joseph, you're not saying complimentary things about that CEO. And of course I wouldn't because that's not what a CEO should be doing. I like my CEOs getting along with regulators. For example, we have a new holding of mine, Equifax, which the CEO recently had a meeting with a key regulator. Bill Polte, this new figure that's over housing and especially focused on closing costs. He met with the CEO of Equifax. He says, I had a good meeting with the CEO of the credit bureau, Equifax. It was super constructive. I appreciate his approach. We want to be invisible to companies as long as we enforce our statutory and legal obligations. Some companies and their CEOs make it easier than others. This is what I like seeing. I like seeing my CEO do the right thing for the shareholder. They're trying to make business run smoothly. They're trying to get the regulators on their side. That's what me, the shareholder, is investing in the company for. That's what we're paying the CEO for. Now, if the CEO of Equifax was insulting Bill Polte through posts online and trying to destroy this relationship of someone that directly regulates the company, that would be upsetting. I'd be very critical of the CEO, but that's not what most CEOs do. So to be clear, the Tesla investors that say that I'm biased against Elon Musk, the reason that I'm uniquely critical against many of the things that Elon Musk does is because Elon Musk does a lot of things to be uniquely critical about. If that wasn't the case, I would not be focused on him at all. But blowing up the relationship with the president on the onset of the RoboTaxi release is something worthy of criticism. Now moving on, we get to this news of the U.S. payroll. It finally came in. This was something that we looked at the news from ADP. They give us some insight, some bit of data, but it actually came in better than expected. U.S. payrolls gained $139,000 in May, which points to gradual moderation. Now again, these aren't spectacular numbers, but they're better than expected. The figures may help temper concerns that companies are quickly ratcheting back employment as they contend with higher costs related to tariffs and prospects of slower economic growth. President Donald Trump's decision to pause some of the more punitive import duties, including those on China, has helped lift sentiment among businesses as well as consumers. So this is what I was talking about in the most recent episode, that this is all lagging data and lagging sentiment. Things were really gloomy in the month of April for businesses. They didn't want to hire anyone. They felt like it was time to turtle in, but a lot of that sentiment has changed from being very gloomy to now being far more optimistic. If you ask those very same business leaders, they feel a lot better because a lot of the rates, a lot of the tariff rates have been lowered substantially. This is welcome news that makes it less likely we'll see a recession this year. Now we also had the earnings report of Lululemon yesterday after market close. The stock is down 20%, down $65. Let's go ahead and take a look at the reasons why directly from the management. We can bring this up on Qualtrim. We have here a transcript summary. We have the company now growing revenue by 7%, 8% on a constant currency. That feels a little slow, 7% growth. That's because it is. Lululemon was growing really fast and now the growth is decelerating rapidly. Their guidance is now for 5 to 7 and 7 to 8% growth in the 53rd week. They're basically saying that they're now growing in this mid single digit rate. Very slow growth for a company like Lululemon. Now I've looked at Lululemon stock for a long period of time. It's one that's shown up a lot because over time it's actually growing at a fast rate. They save a lot of money because they don't do a lot of marketing. You're not going to see advertisements for it. It's all through word of mouth. It seems like it's but I've seen some significant problems with companies like Lululemon and any brand-focused company. It's virtually the same reason that I don't buy Nike stock. If we look at Nike stock, this is a Bill Ackman investment. It's one that's gone through a big sell-off. Nike's down 35% over the past year. It's attracted a lot of value investors, a lot of compound quality investors, but I don't like investing in companies where the moat of the company is primarily through its brand value. Brand value is a moat and it can be powerful at times, but I think it needs to be combined with many other types of moats like network effects, like how embedded the product is, like switching costs, all that type of stuff. Even though Lululemon makes these high-end yoga pants and all of the stuff that people like, there's now many competitors to Lululemon. Many other companies making also high-end clothing and they're undercutting their pricing. You have companies like Alo Yoga, Viore, Athletica, all these new brands popping up, gaining market share. For that reason, I continue to avoid these type of companies. Now we finally get to the news story that Amazon is in the robotics game. In this case, they're in the humanoid robotics game. Amazon is reportedly training human robots to deliver packages. The information reports that Amazon is developing an AI software that will enable robots to operate as package delivery workers that are ferried around in Rivian electric vans and will soon be ready to start real-world testing at a new facility. Citing an anonymous source involved in the effort, the information says that Amazon has almost finished construction of an indoor humanoid park at one of their retail giant San Francisco offices that is roughly the size of a coffee shop. The obstacle course reportedly contains one Rivian van for training purposes. With Amazon aiming to have the humanoid robot, quote, hitch a ride in the back of Amazon's electric Rivian vans and spring out to deliver the packages. The report coincides with Amazon launching a new agentic AI team that's helping develop technologies that will power robots, quote, operating in Amazon distributions and logistic hubs. In a statement to Silicon Valley, Amazon says that, quote, instead of rigid, specialized robots, we're creating systems that can hear, understand, and act on natural language and commands, turning warehouse robots into flexible, multi-talented assistants. Now, this is something that is not only not surprising, but something that I have been saying for years with Amazon. Amazon is the preeminent, leading, biggest robotics company in the world by far, and there's not a close second place. A lot of people talk about Tesla being the leading robotics company. A lot of people say that's the robotics AI robot play. I think it's Amazon, and I've held this position for a while. Amazon has ample experience creating robots. They literally have 750,000 robots working in their warehouses. We've seen footage of these very specific robots, these little mini Waymo machines that glide around the warehouse floors. They pick up different, different shelves of products and they bring them to the picking station. Now, that robot was very specific, and Amazon is broadening the capabilities of robots. Now, there's ones that resemble a bit more of a human, and they say that they can actually feel what they're grabbing. That's how they describe it. They get actually sensor feedback from what they're grabbing. They can see how it feels and determine how much pressure apply, if the product's slipping, and so on. To me, this looks a bit more humanoid. And here we have news that Amazon is now actively trying to create robots specifically for delivering packages from Rivian vans to the house. Now, this is an interesting application of Amazon, because right now we look at the retail business as being very low margin. That's the word repeated from retail. Part of the reason why is it's expensive to deliver all those items every single day, multiple times a day, to the same house, to hire hundreds of thousands. In fact, around 400,000 delivery people to deliver those items from the vans to people's homes. If Amazon was to theoretically replace these workers with robots that jumped out of a van and did the delivery themselves, they would no longer have to pay around 400,000 people. They could save on lunch breaks, they could save on insurance, people getting hurt, taking time off, staffing, training, everything associated with hiring a human. Humans are far more expensive than maintaining robots. We know that through ample evidence over time. This is an opportunity for Amazon to have enormous margin expansion in their primary business, of which they are by far the largest. So just this little news piece, that Amazon is actually testing this, looking at humanoid robots to do delivery, is substantial. And when we're looking at this again, part of the limiting factor of these type of robots has not been the physical technology. The physical technology has been very strong, very good for a long time period. We can make the hydraulics and we can make the machines work well. The difficult part is the software. But AI is helping to solve the software equation. Amazon can infuse the physical hardware with their AI models, train it on how to do these deliveries, how to make it from the van and walk up to the porch, not run into anything, not bump into anything, have lots of safety protocols in the process, and in doing so, raise the margins of the company. So I think this is actually potentially huge news for Amazon. I'll be following the story. It's not the only reason to get bullish on Amazon, but I think it's one more. That's going to be it for this episode. See you in the next one.